Article written by P Manoj
The government is fast tracking a plan to implement electronic Bill of Lading (eBL) as it looks at ways to facilitate business continuity by removing hurdles in the trade documentation process in a post-coronavirus world where the current hard-copy based format could pose a huge risk to the smooth flow of export-import goods.
Bill of Lading
A Bill of Lading, the key legal document in global trade, is issued by a carrier (shipping line/ freight forwarder) to acknowledge receipt of goods, contract of carriage and document of title (ownership) of the goods.
The lockdown restrictions and the need for social distancing to curb the spread of coronavirus have caused severe impediments to EXIM trade in issuance, delivery and dispatch of the hard copy trade documentation required by many departments, authorities and financial institutions.
This has hurt the release of import containers and cargo at various ports in India.
The bottleneck is attributed to the current manual process wherein the customer has to surrender the original Bill of Lading (BL) at the shipping line’s office, collect paper invoice and pay by cash/ bank transfer to the shipping line, collect paper delivery order issued by the shipping line and submit e-delivery order via PCS1x (Port Community System) at the release point (port/container freight station).
On an average, this would take about 11-and-a-half hours of person to person contact.
With the contagious nature of Covid-19 that spreads through multiple forms of contact including contamination through paper, creates a high level of risk and considerable delay in release of import containers and cargo.
Through the PCS1x – launched in December 2018 – the shipping ministry has digitised a major part of port related activities including an electronic invoice (e-Invoice), electronic payment (e-Payment) and electronic delivery order (e-DO) for physical release of cargo by custodians.
“The critical component that is still missing is the digitisation of the Bill of Lading (BL),” says Shipping Secretary Gopal Krishna. “Moving to electronic Bill of Lading (eBL) and enabling Letter of Credit (LC) process digitally will ensure that the trade will move seamlessly and free of paper and people to people contact, thus ensuring that social distancing norms are not affected,” he added.
To implement an electronic Bill of Lading, a proof of concept of the solution will be developed within three weeks by CargoX, a Slovenia (EU)-based company that runs a Smart BL document transfer platform, using the neutral, public blockchain Ethereum network.
Other eBL solution providers such as Tradelens (a global digital trade platform developed by Maersk and IBM), Waves and Bolero are also in the process of being integrated with the Port Community System (PCS 1x) for maritime EXIM cargo.
These eBL solution providers have recognised international indemnity cover from the International Group of Protection & Indemnity Clubs (IG Clubs) and also offer encryption or block-chain based data and transaction security.
The IG Clubs is a 13-member group based in London whichprovide liability cover for about 90 per cent of the world’s ocean-going ships.
Mandating customs, banks and other stake holders in the EXIM trade to adopt and accept electronically generated trade documentation would “help ease the economic and humanitarian challenges, encourage continuity of trade and also enable trade revival in the future”, Gopal Krishna wrote in a April 16 letter to Commerce Secretary Anup Wadhawan.
Original Source: https://www.thehindubusinessline.com/economy/logistics/government-fast-tracks-digitisation-of-bill-of-lading-to-deal-with-a-post-covid-19-world-trade/article31375673.ece